Christina believes that shifts in aggregate demand cause a change in both real output and the price level. She believes that an economic recession will not necessarily self-correct in the long run, and therefore she believes that active fiscal and monetary policy is justified to smooth out the business cycle. Christina is BEST described as a:
A) classical economist.
B) Keynesian.
C) supply-sider.
D) monetarist.

Question

Quizplus · Accepted Answer

Christina's beliefs align with those of a Keynesian economist, who believe that shifts in aggregate demand can cause fluctuations in both output and the price level, and that active fiscal and monetary policy is necessary to stabilize the economy and reduce the impact of business cycles. Classical economists, in contrast, believe in the self-correcting nature of the market and argue against government intervention in the economy. Supply-siders focus on incentives to boost long-term growth, while monetarists emphasize the importance of controlling the money supply to stabilize the economy.

Christina Believes That Shifts in Aggregate Demand Cause a Change